Argentine province aims to block Canada miner Tenke

Argentine province aims to block Canada miner Tenke

7 September 2005

By Hilary Burke, Reuters

BUENOS AIRES, Argentina - Better known for wines than mines, Argentina's Mendoza province passed a law on Wednesday aiming to block an exploration project by Canada's Tenke Mining Corp. on environmental grounds.

And in a separate move, the provincial government announced it will halt mining exploration for 90 days while it fine-tunes regulations, requiring public hearings in the project approval process.

Protesters from west-central Mendoza cheer the measures because they fear mining would pollute their water, specifically with cyanide, and threaten the farm sector.

But miners see this as the latest setback in Argentina, where a few provinces have taken tough environmental stances that some say dilute federal efforts to attract investment.

"The mining community interprets this as an attack on the rule of law," said Jorge Patricio Jones, president of Tenke unit Desarrollo de Prospectos Mineros S.A..

Mendoza's legislature voted to expand the Laguna del Diamante nature reserve from 28,000 hectares to about 170,000 hectares, absorbing the area where Tenke aims to explore for copper and gold.

Government officials say provincial law prohibits mining in protected areas.

"The idea is to stop this project now, to defend our water, the natural habitat and our way of life," said Mario Guinazu, the mayor of San Carlos, Mendoza, which lies some 660 miles (1,100 km) west of Buenos Aires.

Jones said he believes Mendoza will have to respect the company's pre-existing rights to exploration, despite the newly approved law. The national mining code meant to stimulate investment in the sector should take priority, he added, saying the conflict could end in lawsuits.

Mendoza is not the first province to anger miners. In July, legislators in Rio Negro passed a law banning the use of cyanide and mercury in mineral processing.

And in 2003, residents near Esquel, Chubut province voted 80 percent against a mine development by U.S.-based Meridian Gold Inc. for fear of damage to their water sources. As of late July, the project was still on hold.

'Information Orphans'

Guinazu blames both Tenke and provincial mining officials for not explaining to San Carlos residents how the company would operate in the area.

"We have practically been information orphans," Guinazu said.

Jones also criticizes provincial officials for not explaining that a mine on that site would not use cyanide and could be run in an environmentally responsible way.

During the campaign against Tenke's project, Jones recalled a sign showing a bottle of cyanide, a skull and a bottle of Argentina's trademark Malbec wine, asking which bottle people would prefer.

"People have a legitimate concern that there not be pollution," Jones said. "But it is dishonest to insist that agriculture and mining are incompatible."

This week or next, the provincial government will issue a resolution to halt permits for the prospection and exploration of metals and uranium, said Alejandro Rodriguez, Mendoza's undersecretary for development and investments.

"We are not prohibiting the activity, we are simply adapting the norms and this requires work," Rodriguez said, adding that the freeze could be lifted before 90 days pass if the government works quickly.

Jones said the suspension was unjustified and responded to political campaigning in the run-up to October elections.